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May 2000

disponibile anche in italiano

  Giancarlo Livraghi
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Net business jargon is using some peculiar definitions. Of course they are not mathematical formulas; "2" stand for "to". B is for business, C is for customer (or "consumer"). Sometimes they are written on other ways... so we read btob, btoc, ctoc, ctob... and we wonder if someone is trying to fix an old clock.

Of course it’s quite easy to understand what they mean. But it may be useful to look into these standard definitions to understand what they are really about.

B2B (business-to-business)

The consensus is universal: this is the priority, this is where the money is. It’s quite true; so far the bulk of online business is in company-to-company transactions. But there’s little depth to the analysis. Most business-to-business transaction don’t need a website. If we look only at what appears on the web, they are invisible. Several companies are not particularly interested in telling the word what they are doing – except for some bland and generic "corporate publicity". Of course most of this business is legitimate and legal, but there is no advantage in informing a wide audience (or the media) of the most relevant and productive activities – and letting competitors find out too soon, or too easily, exactly what is being done. So it’s there, but often the most interesting developments are those that we can’t see.

B2C (business-to-customer)

"Electronic commerce" is generally understood mostly as selling goods or services to people ("final consumers"). This is not, so far, the biggest part of online business. It’s also often seen as unsuccessful, for the simple reason that hopes sere set too high, too soon, and that countless attempts ere poorly planned and managed. In spite of the delusions and disappointments, it will continue to grow. But it’s not as easy as too many sellers of ready-made solutions are claiming. There are no shortcuts. Selling online doesn’t work unless it’s well integrated with logistics, buying, etcetera. This can’t be done overnight by installing a piece of standard software or setting up a web site. It takes patience, time, consistency and care – a long-term commitment and a willingness to experiment and learn. There would be much more success now in this area id there hadn’t been so many false prophecies, bad starts, hasty projects, poorly conceived operations, unkempt promises – and therefore disappointments

C2C (customer-to-customer)

Person-to-person transactions are the oldest form of e-business. They’ve been there from the beginning, long before there was any widespread use of the internet. They continue to be all over the place, quite invisible to anyone thinking that all business is on a website. They can (in part) be supported on large and visible websites. As in the case of the so called "auctions" that have been growing fast all over the place – but they are only one of many ways of helping people to deal directly with each other or to buy more conveniently from companies.

C2B (customer-to-business)

The most important activity in e-commerce isn’t selling. It’s buying. Quite often that doesn’t mean buying online but checking, comparing, analyzing quality and price before baying in traditional stores or services. Customer empowerment isn’t a legend or a theory, It’s hard fact and it will grow as more people become more aware of the tools they have to pick and choose – and negotiate. This could be the single most important development in the new economy. Maybe scaring for some companies, but an opportunity for all who know how to find the right clues. With or without the internet, in many businesses the concept of marketing (even of market) will have to change radically. We are only at the beginning of a development that can have vast and deep consequences.

The “borders” aren’t clear

Simplistic formulas and standard definitions can often be misleading. The separation between the this-to-that territories aren’t as neat and sharp as it may seem comfortable to believe. When the empowered customer is a company, is that b-to-b or b-to-c? Etcetera... What’s important isn’t choosing a definition, but understanding how it works. An abundance of formulas and attempts to define patterns hides the fact that most business analysts haven’t been able to come to grips with the real problems and opportunities. That’s not surprising, because these are new and fast-changing environments. In practice, it’s much more efficient to forget the formulas and learn from experiment. Trial-and-error is much more effective than any standard theory. This is bad news for the hasty, the lazy, the sellers of miracle solutions and the seekers of instant success. But it’s a great opportunity for genuine cultivation of the internet.

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